When buying and selling real estate, even a seemingly small obstacle can be a real pain in the neck. (Photo: Dave Burdick)
Previously?
Denver real estate quest 2013: An epic undertaking
Denver real estate quest 2013: The suspense is brutal
After a lengthy house search, we?d offered on the 20th house we saw. It was our third offer of the season, and with some luck, the seller accepted our offer.
Now, all we needed was for everything else to go right.
Right.
Like a lot of folks, our home purchase is contingent upon the sale of property we own. (In our case, we have been renting that property to tenants while renting from someone elsewhere; we moved cities and didn?t want to rush a sale.)
While our place was under contract, it wouldn?t close until just over two weeks before the closing date of the place we were buying ? leaving plenty of room for something to go wrong.
Our buyers asked us to fix up a few small things after their inspection. No problem.
But?
Then came the appraisal. The condo that we were selling appraised at 2.7 percent under the price on the contract.
?That?s happening all over the place right now,? one Realtor told me. In fact, David Migoya recently wrote a story on the conflicting pressures on buyers, sellers, appraisers and lenders. (Of course, if you followed me on Twitter, you?d already know that.) The long and the short of it is this: Because there aren?t many properties on the market right now and people are starting to shop around, prices are going up, but because appraisers and lenders took some blame for building up a dangerous housing bubble, they?re quite a bit more cautious than the market is.
From Migoya?s story:
?Buyers have a couple of options,? said Craig Wildrick at Zions Bancorp, which owns Vectra Bank. ?They can increase their down payment, reducing the amount of the loan, negotiate a lower price ? or decide to look for a different property.?
Our buyers chose to negotiate. They dropped their offer to the appraised amount.
For us, this posed a big problem. We?d already come off of our asking price, which had influenced our housing search. Beyond that, it just made us mad. Even if we were being as objective about it as we could be, we thought our condo was a good deal at the price. In a vacuum, we?d have let them walk and just try to find a better place in their desired geography. It would come with a risk of having exactly the same thing happen at exactly the same stage of the sale ? and it would come with the chance that somebody would pay more.
But we really liked the place we were trying to buy and so we were pressed for time. Fuming, we pulled out calculators and looked at the two deals to figure out what we could reasonably afford to do. We dropped our asking price by 1 percent, guessing they?d take it for the above reasons and knowing it wasn?t worth it for us if they didn?t anyway.
They did. It had taken some of the wind out of our sails, but we were still on the track to selling the condo and getting the home we wanted.
We paid for the small fixes and made it to the closing date. I took off from work to go sign a bunch of documents and sell the place, which was far more anticlimactic than signing a bunch of documents to buy a place. The first home I?d owned was no longer in my possession.
Why wasn?t I more excited?
Maybe because the work was only half done?
Next up: Now, let?s get the buying taken care of
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